Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — Q2 2013 Earnings Presentation
59 slides from Mbank Sa's earnings presentation, Aug 1, 2013
Slide 1: Results of BRE Bank Group Q2 2013
Results of BRE Bank Group Q2 2013 Revenue recovery, full year targets on track Management Board of BRE Bank SA Presentation for Investors and Analysts August 1, 2013
Slide 2: Key highlights of Q2/13 at BRE Bank Group
Key highlights of Q2/13 at BRE Bank Group Strong revenue and efficiency: Recovery in volumes: NII at PLN 535.2 M (+6.3% QoQ, -5.4% YoY) Customer loans at PLN 71.9 B (+7.8% QoQ, +5.9% YoY) NFC at PLN 221.5 M (+12.1% QoQ, +1.5% YoY) Deposits at PLN 62.2 B (+6.3% QoQ, +19.2% YoY) Total Income
Slide 3: Agenda
Agenda Summary of Q2/13 Analysis of Q2/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 3
Slide 4: Summary of Q2/13 Results in BRE Bank Group
Summary of Q2/13 Results in BRE Bank Group Key Financials in PLN M Q2/13 Q1/13 Change Q2/Q1 Q2/12 BRE Analyzer Core income 756.6 701.2 +7.9% 784.0 Total income 926.3 829.2 +11.7% 921.2 Total costs (417.9) (401.7) +4.0% (406.8) Loan Loss Provisions (159.5) (27.7) +476.6% (109.0) Profit before tax 348
Slide 5: Development of Loans to Clients
Summary of Q2/13 in BRE Bank Group Development of Loans to Clients First signs of lending recovery Development of Gross Loans (PLN M) BRE +5.8% Analyzer +6.0% +7.8% +6.3% QoQ YoY 74,534 70,436 71,827 2,861 69,588 69,170 4% 3,271 5% 3,169 3,366 3,017 -5.2% -12.5% 32,523 44% 28,374 40% 30,727 28,405 2
Slide 6: Development of Deposits
Summary of Q2/13 in BRE Bank Group Development of Deposits Resilient deposit base despite aggressive repricing Development of Deposits (PLN M) BRE Analyzer +19.2% +6.3% +9.7% YoY -0.4% QoQ 62,195 57,229 57,984 58,532 1,155 2% 614 501 794 52,190 578 1% +45.4% +99.7% 22,647 27,351 44% 24,249 27,937 24
Slide 7: Funding structure details
Summary of Q2/13 in BRE Bank Group Funding structure details A strong and diversified funding base BRE Bank Group’s structure of funding BRE Bank’s ratings BRE Bank Group’s funding strategy as of June 30, 2013 Other Fitch Funding needs reduced by CHF loan book Retail repayments (c. CHF 350-400 M p
Slide 8: Business Development: Corporates & Financial Markets
Summary of Q2/13 in BRE Bank Group Business Development: Corporates & Financial Markets Corporate banking picking up with volume growth across all client groups Loans (PLN M) Deposits (PLN M) +14.6% +11.0% +16.5% +20.8% 32,523 27,351 28,374 27,922 1,876 24,633 3,763 22,647 3,550 1,603 1,658 Other 4,
Slide 9: Business Development: Retail Banking
Summary of Q2/13 in BRE Bank Group Business Development: Retail Banking Encouraging volume trends despite continued focus on margins Loans (PLN M) Deposits (PLN M) +0.9% +24.9% +2.4% -4.0% 38,791 38,231 39,149 35,091 33,689 8,246 8,863 9,247 63 54 26,979 3,480 3,714 3,808 35 12,150 9,139 6,485 Non-m
Slide 10: Agenda
Agenda Summary of Q2/13 Analysis of Q2/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 10
Slide 11: Income of BRE Bank Group
Analysis of Q2/13 Results Income of BRE Bank Group Strong rebound in revenues driven by core income growth BRE Bank Group’s Income (PLN M) +0.5% BRE Analyzer +11.7% QoQ YoY 921.2 917.7 926.3 30.8 5.4 24.5 28.7 20.5 822.9 829.2 36.1 99.5 +23.0% 2.6 83.3 3.1 76.1 51.5 102.5 +35.2% 11.2 0.8 0.0 75.8 2.
Slide 12: Margin and client funds management
Analysis of Q2/13 Results Margin and client funds management Client funds actively managed to support margins in a challenging interest rate environment Deposit rates v. market rates Evolution of total client funds 3.7% 3.6% +4,753 (in PLN M) 3.2% 3.0% 2.8% 2.7% 2.6% 2.4% 2.5% 2.0% 2.0% 1.9% +2,343
Slide 13: Costs of BRE Bank Group
Analysis of Q2/13 Results Costs of BRE Bank Group Strong cost discipline maintained Overhead Costs + Depreciation & Amortisation of BRE Bank Group (PLN M) BRE Analyzer +2.7% QoQ YoY +4.0% 428.4 434.0 417.9 406.8 20.3 22.7 401.7 24.0 24.8 45.3 51.4 26.0 -7.7% -3.7% 45.6 50.6 44.8 150.3 149.9 +2.0% -9
Slide 14: Loan Portfolio Quality
Analysis of Q2/13 Results Loan Portfolio Quality Stable risk indicators, superior asset quality BRE Bank’s NPL Ratio Value of impaired loan portfolio of BRE Bank Group (%) (PLN M) 8.8% 8.8% 8.9% 8.7% +5.8% 8.6% +0.1% 3,756 3,632 3,641 3,645 3,445 5.7% 5.5% 5.5% 5.4% 5.1% Q2/12 Q3/12 Q4/12 Q1/13 Q2/1
Slide 15: Loan Loss Provisions
Analysis of Q2/13 Results Loan Loss Provisions Cost of risk normalizing amid increasing coverage ratio BRE Bank Group’s loan loss provisions (PLN M) +42.6% Proactive and conservative 92 provisioning across all exposures 79 65 55 52 H1/13 cost of risk of 55 bps v. 66 159.5 bps in H1/12 and 66 bps
Slide 16: Key Regulatory Ratios
Analysis of Q2/13 Results Key Regulatory Ratios Capitalisation and liquidity surpassing all regulatory requirements and supporting growth plans BRE Bank Group’s Capital Adequacy Ratio BRE Bank’s LCR and NSFR 208% 18.7% 18.9% 18.2% 177% 16.2% 15.4% 5.7% 5.4% 14.8% 5.1% 146% 5.0% 4.5% 4.7% 118% 116% 1
Slide 17: Update on rebranding process
Update on rebranding process Rebranding is an integral element of the One Bank Strategy, aimed at full use of the business potential of the Bank and its subsidiaries Main features Group rebranding Modernisation of the group's image around its strongest brand Will apply to service offered in the
Slide 18: New mBank: mOKAZJE – transactional marketing platform
New mBank: mOKAZJE – transactional marketing platform Opportunity to save money without coupons or hassle, only by just paying with mBank’s cards. Strong potential to create value for merchants. Users of mOKAZJE programme 270 thou. Users (in thou.) via both platform have the access to the platform v
Slide 19: Agenda
Agenda Summary of Q2/13 Analysis of Q2/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 19
Slide 20: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Bottom of the cycle reached, rebound in H2 expected GDP forecast (% YoY) Rotation of household assets supports consumption 8 50% 6 4.7 4.5 4.3 4.4 4.9 7 3.7 4.2 40% 3.2 3.5 3.1 3.2 4 2.7 2.3 2.4 2.5 30% 5 1.3 1.7 1.0 1.7 0.7 1.2 2 0.4 0.5 0.5 20% 3 0 10% 1 -2 0% -10% -1 -4
Slide 21: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Subdued credit action; reconstruction of savings is over Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 70% 60% 30% 50% 20% 40% 10% 30% 20% 0% 10% -10% 0% -20% -10% Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-08 Sep-08
Slide 22: 2013 Outlook – BRE Bank Group beyond Q2/13
2013 Outlook – BRE Bank Group beyond Q2/13 Implementation of the „One Bank” strategy to ensure sustainable 1 outperformance in an evolving client and regulatory environment Strong capital and ample liquidity underpinning the balance sheet 2 and supporting strategic initiatives Revenue generation to
Slide 23: Agenda
Agenda Summary of Q2/13 Analysis of Q2/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 23
Slide 24: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines & Update on Strategy Page No. Selected Financial Data & Historical Performance Consolidated Profit and Loss Account under IFRS 26 Retail Banking 41-46 Consolidated Statement of Financial Position 27 Summary of Q2/13: Fi
Slide 25: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 25
Slide 26: Consolidated Profit and Loss Account under IFRS
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Profit and Loss Account under IFRS 2012-2016 Strategy PLN thou. Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 By quarter Net interest income 565,764 573,085 555,47
Slide 27: Consolidated Statement of Financial Position
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Statement of Financial Position 2012-2016 Strategy Assets (PLN thousand) Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Cash and balances with Central Bank 928 732
Slide 28: BRE Bank Group's Ratios
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines BRE Bank Group’s Ratios 2012-2016 Strategy Financial Ratios Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Net Interest Margin YtD 2.43% 2.43% 2.39% 2.08% 2.08% Cost to Income R
Slide 29: BRE Bank Group's historical performance (1/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (1/3) Subsidiaries Business Lines Net interest income Net fee and commission income 2012-2016 Strategy (PLN M) (PLN M) NIM 2.3 2.3 2.2 2.5 2.4 2.4 2.1 +11% +13% -5% -6% 840 840 746 2,167 2,234 1,8
Slide 30: BRE Bank Group's historical performance (2/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (2/3) Subsidiaries Business Lines Operating costs Pre-provision income 2012-2016 Strategy (PLN M) (PLN M) +2% 55.1% 54.2% 51.8% 47.7% 46.4% 43.5% 46.7% C/I ratio +14% +3% 1,680 1,661 -10% 1,550 1,
Slide 31: BRE Bank Group's historical performance (3/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (3/3) Subsidiaries Business Lines Total assets Equity and CAR 2012-2016 Strategy (PLN B) (PLN M) +14% 10.04% 11.50% 15.90% 14.96% 18.73% 14.84% 18.18% CAR +5% +10% +24% 98.9 102.2 108.2 90.0 95.0
Slide 32: Net Interest Income & Margin
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Net Interest Income & Margin Business Lines 2012-2016 Strategy Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 1,144.5 1,159.7 604.2 1,093.4 53.9 571.4 12
Slide 33: Fee and Commission Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Fee and Commission Income Business Lines 2012-2016 Strategy Commission Income Structure (PLN M) QoQ YoY 350.0 +9.3% -1.1% 320.6 318.4 41.2 12% 310.3 308.9 43.3 35.6 28.9 37.7
Slide 34: Trading Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Trading Income Business Lines 2012-2016 Strategy Net Trading Income Structure (PLN M) 99.5 102.5 QoQ YoY 9.1 83.3 28.0 76.1 9.5 75.8 6.8 +310% +195% 90.4 80.9 73.8 69.0 74.5 +
Slide 35: Balance Sheet Analysis: Assets & Liabilities
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Assets & Liabilities Business Lines 2012-2016 Strategy Structure of Assets Structure of Liabilities (PLN B) (PLN B) 108.2 108.2 102.2 103.1 4.5 4% 102.
Slide 36: Balance Sheet Analysis: Currency Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Currency Structure Business Lines 2012-2016 Strategy Currency Structure of Loans (net) Currency Structure of Amounts due to banks and customers1) (PLN
Slide 37: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Structure of Loans and Deposits Business Lines 2012-2016 Strategy BRE Bank Group’s Loan Structure BRE Bank Group’s Deposit Structure as of June 30, 201
Slide 38: Balance Sheet Analysis: Loan Portfolio Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure Business Lines 2012-2016 Strategy BRE Bank Group’s Sector Exposure by Industry as of June 30, 2013 Households Real estate mana
Slide 39: Detailed Development of Core Tier 1 ratio and CAR
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Detailed Development of Core Tier 1 ratio and CAR Business Lines 2012-2016 Strategy BRE Bank Group’s Core Tier 1 Ratio (%) +0.22 +0.01 13.51 -0.27 +0.3
Slide 40: Results of Subsidiaries
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Results of Subsidiaries Business Lines 2012-2016 Strategy Profit before Tax of Consolidated Subsidiaries (PLN M) 36.6 Q2 Q1 29.8 14.7 24.8 17.6 20.3 9.6 3.8 15.7 3.9 12.3 21.9
Slide 41: Retail Banking
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q2/13 Retail Banking 41
Slide 42: BRE Bank Retail Banking: Summary of Q2/13 Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Summary of Q2/13: Financial Results Business Lines 2012-2016 Strategy Profit before Tax of Retail Banking Segment1) Number of Retail Outlets (by quarter, PLN M) -5.2% 263 265 262 258 258 35 35 35 35
Slide 43: Sales of New Retail Loans
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Sales of New Retail Loans Business Lines 2012-2016 Strategy Quarterly Sales of Mortgage Loans Quarterly Sales of Non-Mortgage Loans (PLN M) (PLN M) +17.3% +4.8% 732.7 -33.6% 972.6 917.7 928.4 49.0 5%
Slide 44: Mortgage Loans: Portfolio Structure and Quality
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Mortgage Loans: Portfolio Structure and Quality Business Lines 2012-2016 Strategy BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking1) loa
Slide 45: BRE Bank Hipoteczny (BBH)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Bank Hipoteczny (BBH) Business Lines 2012-2016 Strategy Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) -0.7% -1.8% -22% 4,115 4,128 4,108 4,160 4,087 15.7 48
Slide 46: BRE Ubezpieczenia (BRE Insurance)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Ubezpieczenia (BRE Insurance) Business Lines 2012-2016 Strategy Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) +8% -60% 2,
Slide 47: Corporates & Financial Markets
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q2/13 Corporates & Financial Markets 47
Slide 48: Corporates and Financial Markets: Summary of Q2/13 Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Financial Markets Subsidiaries Summary of Q2/13: Financial Results Business Lines 2012-2016 Strategy Result before Tax of the Segment Corporate Branch Network (by quarter, PLN M) Offices Branches -25.9% -32.3% 48 48 48 47
Slide 49: Leasing and Factoring
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Institutions Subsidiaries Leasing and Factoring Business Lines 2012-2016 Strategy Profit before Tax (PLN M) Leasing contracts (PLN M) +22.1% +41.8% 24.8 1,264.1 20.3 9.6 891.2 BRE Leasing 3.8 818.3 432.9 16.5 15.2 Q2 Q1 4
Slide 50: Trading and Investment Activity: Market Shares
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Market Shares 2012-2016 Strategy BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for Q2/13 (PLN M) 34,177 9.0% 25.7% 23,
Slide 51: Dom Inwestycyjny BRE Banku (DI BRE)
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Dom Inwestycyjny BRE Banku (DI BRE) 2012-2016 Strategy Number of Accounts with DI BRE DI BRE Equities Trading WSE Q2/13 (thou.) (PLN M) DI BRE accounts 50.2 +20% -1% eBroker (m
Slide 52: BRE Bank Group's 2012-2016 Strategy Summary
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy BRE Bank Group’s 2012-2016 Strategy Summary One Bank for Customers and Employees 52
Slide 53: Vision of BRE Bank Group
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Vision of BRE Bank Group Business Lines 2012-2016 Strategy One Bank for Customers and Employees Organic growth supported by cutting-edge technology, anchored on a healthy balance sheet str
Slide 54: Highlights of BRE Bank Group's Strategy
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Highlights of BRE Bank Group’s Strategy Business Lines 2012-2016 Strategy Key initiatives of the Strategy Better use of Unification of branding infrastructure policy Outlets availabl
Slide 55: One brand
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One brand Business Lines 2012-2016 Strategy The Bank will strengthen its market image under mBank brand Current situation Future benefits 3 main brands of BRE Bank Group: mBank, BRE Ba
Slide 56: One Network
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One Network Business Lines 2012-2016 Strategy Integrated distribution network available to all clients Current situation Number of branches Future benefits PKO BP 1,199 Limited access to
Slide 57: Financial Performance Targets
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Financial Performance Targets Business Lines 2012-2016 Strategy An efficient business platform supported by a strong balance sheet Loan to Deposit Assets Income Growth Cost/Income Ratio CA
Slide 58: Further enhancing our reporting standards
Further enhancing our reporting standards BRE Analyzer An innovative and convenient tool to analyse BRE Bank Group’s financial and business data Analyse, customise, export and print selected data on BRE Bank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Compreh
Slide 59: Contact details
Contact details BRE Bank’s Investor Relations at your service: Relacje.inwestorskie@brebank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 Head of Investor Relations Fax: +48 22 829 15 19 E-mail: wojciech.chmielewski@brebank.pl Paweł Lipiński Direct dial: +48 22 829 15 33 Investor Relations O